3453 Days !!



Hi, don’t say STE never give “kang-tao” or tips, you know what this number meant for right! Hahaha... just kidding.

Congratulation ! for those who have invested in the US market, especially those in tech sectors like FANGs .

Yes !!

·         The equity bull market is now the longest on record, at 3,453 days.
·         The benchmark S&P 500 has surged a whopping 323% over the period.
·         As traders celebrate the feat, they have four main drivers to thank: earnings growth, share buybacks, extended monetary accommodation, and a buy-the-dip mentality.

<image credit:BusinessInsier.com>


But what about the valuation ? is current bull runs supported by earning, which is the most important criteria in the long term market growth.

Current PE for SP500 seems at the higher side and pointed to an over-valuation.

Current Shiller PE Ratio: 33.29 +0.00 (0.01%)
3:45 PM EDT, Tue Aug 28
Mean:
16.56
Median:
15.66
Min:
4.78
(Dec 1920)
Max:
44.19
(Dec 1999)
Shiller PE ratio for the S&P 500.
Price-earnings ratio is based on average inflation-adjusted earnings from the previous 10 years, known as the Cyclically Adjusted PE Ratio (CAPE Ratio), Shiller PE Ratio, or PE 10.

image credit to fool.com


Another reason most of the analyst believed was the “Share buybacks” if the current bull market is not caused by “earning growth”. As below the article highlighted, J.P. Morgan estimated that companies will spend close to $800 Billions in stock buybacks in 2018, which is 51% jumps from last year and would be a single-year record.


<image credit:Golma Sach>














Why Stock Market Buybacks Should Make Investors Nervous (from Fortune.com)


The Bull Market’s Next Test: Slower Earnings Growth (from WSJ.com)

 

 

Lately, quite a few readers have emailed me requesting for the method or how to plot the “regression line” for world indexes, which prompted me to realize that it had been quite sometimes I never update the world market regression line.

 

Here's the latest :







Add caption








Not many changes where the world develops market continue to reach higher high, especially NASDAQ hitting above 8000 recently. In contrast to this, STI had retreated from a recent high of 3615 achieved in May 2018 to latest 3251 ( -10% ) ,which is also at long term mean level. Same for Hong Kong HSI which dropped by more than -14% from early 2018 to the current level.

Although our market is not as high as US / EUR, bear in mind that when world markets tumble, we will catch a cold as well.

 

We seem to be an indifferent world with other’s better performed market like the US , well, some investors may still see good returns here and there with +10 to 20% return vs STI if they could find any gems among 600+ stocks listed here in SGX.

 

I am not sure what am I going to highlight here as markets divergence are very common and may not be a bad thing at the end of the day.

 

Happy investing and continue to hunt for new “gems” for better returns in 2018.

 


Cheers !!




image credit to AZ Quotes.com

Comments

  1. Hi STE, how do you get the Shiller PE ratio?

    ReplyDelete
    Replies
    1. Hi Yaruzi,

      From below link ...ratios for S&P 500
      Cheers !


      http://www.multpl.com/shiller-pe/

      Delete
  2. Thanks for sharing the charts, very valuable information!

    ReplyDelete

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